CINCINNATI — With a glistening $400 million casino set to open in downtown Cincinnati today,
officials and casino executives in two neighboring states are looking at the development with
trepidation as they prepare to watch tax dollars flow into Ohio.

Horseshoe Casino Cincinnati is all but guaranteed to dip into Indiana’s casino revenue, which
has declined steadily in the past few years. For Kentucky, Cincinnati’s casino represents money
that it could be, but isn’t, making.

The casino will open after more than two years of construction. It will be the last of four
casinos that Ohio voters approved in 2009 after a statewide campaign touted the immediate boost the
casinos would give to Ohio’s economy.

Casinos in Cleveland, Toledo and Columbus all opened over the past year and have brought in
nearly $404 million combined. From that, about$133.2 million has gone to Ohio schools, counties and
cities.

Cincinnati’s casino is projected to draw about $227 million in gross revenue in its first year.
That would bring in about $75 million in taxes.

Although those figures are far lower than earlier estimates, Cincinnati Mayor Mark Mallory
hailed the casino as a regional and national destination ahead of its opening.

“It’s a home run,” Mallory said. “This casino will have the ability to draw people from all
around the country. … This is a top-line casino, and the people who are accustomed to the big
casinos in Vegas, they’re not going to miss anything here.”

Although no hotels are attached, and nothing quite compares to the energy or spectacle of the
Vegas strip, Mallory referred to the Cincinnati casino’s bustling location on what used to be a
run-down parking lot and ticked off amenities including a buffet, a VIP players’ lounge with high
limits, a World Series of Poker room and three outward-facing restaurants, including Jimmy Buffet’s
Margaritaville and Bobby’s Burger Palace by celebrity chef Bobby Flay. Both Buffett and Flay also
have outposts in Las Vegas.

Across the state line in Indiana, casinos and state leaders have been bracing for the
development.

“The hovering threat to Indiana’s dominance in commercial casino revenues among its sister
states is evolving into reality,” Ernest Yelton, executive director of Indiana’s Gaming Commission,
wrote in a 2012 annual report to Gov. Mitch Daniels. Nearly all of Indiana’s 13 gambling venues
would be affected, he added, “some dearly.”

Over the past two decades, Indiana’s casino industry has brought in $10 billion in taxes to
become the state’s third-largest revenue source after sales and income taxes.

But casinos there are in decline. Last year, taxes on casino revenue in Indiana dropped 4.2
percent, from $787.4 million in 2011 to $754 million in 2012, the steepest drop amid a three-year
fall.

In Kentucky, Democratic Gov. Steve Beshear has tried and failed every year since his 2007
election to legalize casinos in the face of opposition from Republican lawmakers and a racetrack
industry worried about competition.

At a news conference on Feb. 21, Beshear lamented the opening of Cincinnati’s casino.

“The casino in Cincinnati’s good news for Ohio and bad news for Kentucky,” Beshear said. “Right
now, we’ve got thousands of Kentuckians that have been going out of state, and now they’ll also be
going to Cincinnati to spend their Kentucky money in Ohio, and then Ohio’s going to keep the
benefits of that.”

Ohio had a similar battle before voters approved the state’s four casinos in 2009, with four
previous failed attempts.

The 2009 issue won approval after proponents lamented tax dollars going to Indiana, Michigan and
West Virginia, and said that casinos in Ohio’s four largest cities would create tens of thousands
of jobs and boost the economy.

Ohio’s casinos were forecast to bring in nearly $2 billion annually. That would have generated
$643 million in taxes for schools, counties and cities. Now, their yearly revenue is expected to be
a little less than $1 billion.

Industry experts say the lower revenue is a result of the economic climate and competition from
storefront gambling-style operations in the state known as Internet cafes.